Energy Secretary Alfonso Cusi convened an emergency meeting with downstream oil industry players on Friday to push for the establishment of a strategic petroleum reserve (SPR) to decrease the impact of global supply disruptions.
“Once again, the government and private sector must band together and make things happen. We are all consumers, and we must exhaust all available options to make things easier for the consuming public,” Cusi said, as fuel prices have risen sharply for nine consecutive weeks.
The move came as the Department of Agriculture (DA) announced fuel subsidies to farmers and fishermen under a P500 million program would begin this month.
Cusi also cited the P2.5 billion in fuel subsidies for public utility operators and drivers.
During the meeting, Cusi emphasized the need for industry players to comply with the minimum inventory requirement.
Executive Order No. 134 provides that oil companies and bulk suppliers need to maintain at least 15 days supply of petroleum products and a minimum stock equivalent to seven days for liquefied petroleum gas (LPG).
Refiners, on the other hand, must secure a minimum inventory of crude oil and refined petroleum products equivalent to 30 days.
According to the DOE-Oil Industry Management Bureau, inventory data as of Feb. 28 indicate sufficient supply levels (diesel: 44.5 days’ worth, gasoline: 85.4 days, kerosene: 80.2 days, LPG: 27.7 days, jet fuel: 69.9 days, and fuel oil:44.4 days).
He also proposed a partnership between the oil companies and the Philippine National Oil Company that would grant the government access to the former’s available storage capacities to speed the development of a strategic petroleum reserve.
For their part, the industry players assured Cusi that they do not foresee any supply problems despite the war in Ukraine.
The industry also assured Cusi regarding his concerns of potential hoarding because it is “highly improbable” due to the “elasticity of fuel demand and pre-programed product deliveries.”
The meeting included representatives from the Philippine Institute of Petroleum, Pilipinas Shell, UniOil, Petron, Chevron Philippines, FilOil, Phoenix Petroleum, SeaOil, Apex Petroleum, Jetti, and Liquigaz.
Agriculture Secretary William Dar said his agency recently met with the Budget and Energy departments to sign a joint circular on the fuel subsidy for farmers and fishermen that President Duterte approved this week.
“Five hundred million is now ready to be given this March,” Dar said in a televised public briefing.
“We are going to submit the guidelines today and we’ll sign immediately the joint circular for the distribution to corn farmers and fishers.”
But he said they have yet to determine how many people would receive the fuel subsidy, and said this would be announced “in due time.”
A congressional leader on Friday urged the government to speed up the distribution of fuel subsidies and other assistance to public utility vehicles affected by recent oil price hikes.
Bagong Henerasyon Rep. Bernadette Herrera called on the Department of Budget and Management (DBM), to release guidelines on the fuel subsidies for both the transportation and agricultural sectors.
“At times of crisis, those in government are expected to act with reasonable dispatch in providing much-needed relief to the public,” Herrera said.
“The government should not dilly-dally in taking action,” she added.
The Cabinet-level Development Budget Coordination Committee (DBCC) earlier said it was ready to disburse P2.5 billion for fuel subsidies on top of P500 million for farmers and fishermen but Malacañang said it would be up to the DBM to interpret the law.
The 2022 General Appropriations Act provides funds to bankroll fuel subsidies to the transportation and agriculture sectors, but only if crude oil prices reach $80 per barrel for three consecutive months.
The Land Transportation and Franchising Regulatory Board, meanwhile, said it had already asked the DBM to expedite the subsidies.
Camarines Sur Rep. Luis Raymund Villafuerte also urged the government to move faster to provide relief from high fuel prices.
“For nearly two years now, our energy officials have been talking the talk about a national strategic reserve for petroleum products, but they have not yet to walk the walk,” Villafuerte said. “In fact, the best that DOE Secretary (Alfonso) Cusi can assure a worried public is to tell them that the PNOC has been tapped to do a feasibility study on it.”
“My only question is: Why are our energy officials seemingly taking their own sweet time to put flesh into this SPR? They should start putting their money where their collective mouth is—rather than just emitting hot air with this blabbering (about studying a national fuel reserve plan) that only contributes to global warming,” he said.
Senator Joel Villanueva, meanwhile, batted for a P2 billion subsidy for fishermen, given that boat fuel accounts for half their operating costs.
Also on Friday, Albay Rep. Joey Salceda said the House committees on economic affairs, energy, transportation, and ways and means will form a fuel crisis ad hoc committee and hold a special hearing on Monday to discuss ways to control the rise in fuel prices.